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Effectively Manage the Cost of Supply Chain Disruptions Part 3

Published December 14 2021

Conversations on Supply Chain: Process Improvements Today

Manufacturers across the globe experienced difficulties with their supply chains over the last two years ranging from quality and sustainability, risk mitigation, and customer expectations as a result of the global pandemic. Alithya and its customers felt the effects of this disruption and worked together to make necessary adjustments.

Featured guest customer Arvind Sahu, Head of Information Technology at Kari-Out and Alithya discussed best practices of quality and sustainability, risk mitigation, and customer expectations and how to anticipate the next disruption in the supply chain. Please read below for excerpts from this informative conversation. Part one of this blog series and part two can be accessed here.

What do you see in terms of what other companies are doing right now to manage their supply chains?

I'm going to speak again on the customer side of the chain, but to basically go one level deeper the next step in the journey. We talked about having a forecast through these other tools and carrying that on in front of a customer, getting their feedback. Having that to be a bit of a more integrated approach. This isn't for every company and every maturity level and every size, but if I have either strategic vendors or strategic customers, they're more willing now than ever to share and collaborate on this. They have, again, the same challenges that we have, and they want them solved. They see us as a critical link in their chain or to the extent they do, they're willing to work with us.

That comes down to sharing between customer and vendor where we're both of those, both the customer and the vendor. But sharing this data, not just let's have a meeting and pull up our spreadsheets and talk and capture notes, but really sharing information, sharing production schedules in a digital format. And that's just the next iteration of the same principle, a more mature version of the same premise.

I'm also seeing that to the supplier side. Some of our customers, they're looking at how do they have, how do they create a more strategic relationship with their suppliers, and not just looking at the supplier as a vendor but again, it's really changing that approach. It doesn't fit for every supplier that you have but identifying those that really are key and establishing a different level of relationship with them.

Identify the ones that have been really good about working with you in the past, those that meet the schedules and the demands and that are willing to go the extra mile for you working and building on those relationships to understand, "Hey, when product A isn't available, are there other options that are out there that maybe aren't that exact same spec, but they're close enough or maybe they even exceed the specs that you have," allows you to have a better product that you're delivering to your customer.

Having that communication, I know we keep coming back to that, but I think it's an important element of what we're talking about today. As we talk about data and we talk in terms of the digital and the digitization of our commerce, there's still that aspect of that human-to-human interaction. It can be face to face, it can be in the same physical room. It can also take place in virtual rooms, just like we're meeting today, and being able to have that type of collaborative conversation and brainstorming and talking through challenges and business problems, and then working together to find those solutions. That's a very low-tech answer, but that is part of what we're seeing is customers and suppliers just working more in a collaborative manner.

There's so much talk about this idea of achieving one version of the truth because up to now all the different supply chain partners have had their own forecasts, their own data, they don't want to share, it's proprietary, they are afraid the competition will see it. Is that paradigm is breaking down in the face of these technological advancements and changes in attitude?

There is still the secret sauce that it's going to be the secret sauce and every company has that and they should protect it, they should understand where that boundary exists. But what I am seeing is that, again, in those strategic relationships, customer to customer, vendor supplier to customer being able to create and to have that dialogue and to be willing to share that information that it actually does open up additional avenues, it opens up new ideas that maybe you didn't think were possible. And part of it is that in solving, maybe we're trying to solve a problem to reduce our cost and we achieve that, but in the midst of doing that where I'm actually reducing my costs, I actually find out that I'm providing a better product and a better service to my customer. Well, that's even better.

What do you see out there right now from Microsoft in the area that we're talking about here today?

The things that I'm seeing from Microsoft has a lot to do with advanced scheduling, definitely taking the aspects of exactly what we've talked about today. Taking and applying machine learning, taking what's taking place, not just within one area of the country or one country within a region, but really more of a global view and bringing that aspect to those models. And then fine tuning that, it's not that the models are static, they're constantly being updated. And as factors change, the model changes as well and so it's constantly being updated. We see definitely more focus around the high volume, high velocity type aspects to it. Even things around better, faster, more accurate, taking an inventory control.

Again, that's a little bit to the maybe to the boring side, but just often being able to accurately know what you have on hand and where it's located and being able to get it and get it out the door and get it to the right customer. Those very basic elements become really important when we have other challenges that are outside the walls. And I mentioned before about that aspect of sense. We talked about IoT, definitely Microsoft is very much looking at and investing in adding that IoT capability so that you do have that better indicator, whether it's a machine down that inhibits you from being able to produce, maybe it's sensing when a machine that's at your customer's location, it's having problem or that it needs to be repaired before it does go down. Anticipating that, being ahead of that curve so that you don't have that unplanned downtime, those aspects are very real to where Microsoft is investing.

In a larger sense, we use the word prescriptive throughout this discussion, which is one step up from descriptive. Do you think AI and the machine learning capabilities are going to lead us into an area if they haven't already, where the machines are actually telling us what to do and we're following their advice. Do you think that is that going to happen?

In some ways, I hope not because it sounds a little terrifying. But that continuum will go forever and ever. And the constraint that these machines have today is the constraint we've always had; we have limited data to give them. I mentioned a new product, or a product is uncommonly sold, statistics can't predict what's going to happen now more than they could before. The tools right now make statistical analysis much more attainable, and I think that's the chapter we're going to be in for a while is better leveraging classical statistics and making those more accessible to us. When it comes to predicting decisions, I think we're aren’t there yet, that'll get here someday. We'll need new careers when that happens, so I hope it's a little while.

Would you like to hear more of this webinar on managing supply chain disruptions? You can access the full webinar on-demand now:

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